Enhanced liquidity because of the presence of eBay and graded cards, as well as the presence of new online trading sites such as COMC.com.

A half-generation of current untapped potential demand.

Fantasy sports, sports betting, and untapped redemand.

We discussed the first three points in Part 1. Let's go on to point No. 4.

An enhanced baseball prospecting gameIn 1992, Topps changed the rookie-card game forever by including cards of prospects who had yet to play a game in the big leagues -- and were often pictured in street clothes -- in its landmark 1992 Bowman set. As this practice continued, the prospect cards included in Bowman sets were considered to be a player's rookie card until 2006, when only players who had been placed on a team's 25-man roster could have an "official" rookie card featuring the official MLBPA Rookie Card logo.

However, Topps was grandfathered into the practice of including minor-league prospects in its major-league sets, and it continues to include prospect cards as "inserts" in its Bowman, Bowman Chrome, Bowman Draft, Bowman Platinum, and Bowman Sterling sets. (The term "insert" is used loosely here, as draft picks make up 165 of the 220 base cards found in packs of 2012 Bowman Draft, for example, while "official" rookie cards make up the other 55.) And official designations aside, collectors still recognize a player's first Bowman card -- labeled "1st Bowman Card" and "1st Bowman Chrome Card" for the chrome versions -- as a player's true effective rookie card, whether it's included in the Bowman, Bowman Chrome, or Bowman Draft packs.

Whether this is good for the hobby is a source of debate. On one hand, there's no question that the "official" RC vs. 1st Bowman Card problem -- along with the fact that Topps includes the 1st Bowman cards in three different sets each year -- can be quite confusing to new collectors, or anybody who hasn't bought a baseball card in the past decade or two. Moreover, most of the 1st Bowman Cards are of players who are several years away from playing in the majors, if at all, and with an extremely high wash-out rate. Contrast this with a sport like hockey, where at least a player must actually play in the NHL before having a rookie card, or football, where every player who plays in the NFL and has a rookie card has generally played three or four years of college before turning pro.

As a consequence, baseball cards are generally far more speculative upon initial release than are their football, hockey, and basketball counterparts.

On the other hand, we know where to find the key cards every year -- the 1st Bowman Chrome Card or auto, or a limited print, serialized refractor parallel of the card, as released in the Bowman, Bowman Chrome, and Bowman Draft packs. And as a pure game of identifying baseball's brightest prospects before they become baseball's biggest stars, there's no question in my mind that this prospecting game is a lot more exciting than it might be under different circumstances.

Enhanced liquidity because of the presence of eBay and graded cards, as well as COMC.comIn general, eBay has brought liquidity to the secondary baseball-card market by providing a default meeting place for buyers and sellers. If a prospective buyer is looking for a particular card, he no longer has to go to a card show (and card shows don't exist with the same size and frequency as they did 20 years ago anyway) to try to look for it -- the buyer most likely only needs to look on eBay. And while eBay and PayPal fees are quite hefty, if you're a seller, eBay is generally the easiest place to find a buyer.

The presence of cards professionally graded by PSA and BGS has also helped enhance liquidity by effectively eliminating both the information and skill gaps between the buyer and seller; with graded cards, the buyer has full knowledge of a given graded card's condition and value without having to either see the card in person, or otherwise have the expertise to gauge a card's condition and, thus, value.

The online consignment site COMC.com has further enhanced liquidity of lower-priced cards by creating a centralized online exchange where all of the cards listed online are in one physical location and can be traded multiple times without being shipped multiple times. Launched in 2007 as CheckOutMyCards.com by former Microsoft employee Tim Getsch and his wife, Julia, COMC.com allows users to submit cards to the company's warehouse in Seattle, where the cards are scanned front and back and listed online for a small fee, as little as $0.25 per card.

In contrast to eBay, where a seller typically incurs both eBay and PayPal fees for every transaction made, a seller on COMC instead receives store credit for the full amount of the sale and pays a further 20% fee upon cashing out -- similar to the way a stock investor only pays a capital-gains tax upon selling a stock, and not while holding. Meanwhile, a buyer pays shipping only if he wants to have the item physically shipped; he can turn around and relist the item without incurring a shipping cost (the card is already located in COMC's warehouse) or can otherwise save on shipping costs by waiting until he has acquired multiple cards.

As such, users can flip cards for profit on COMC.com without ever physically being in possession of an actual card, the same way a stock investor can trade stocks online without ever physically being in possession of a stock certificate. But more importantly, the site dramatically improves the liquidity of low-priced cards by reducing the otherwise prohibitive transaction costs associated with them -- most notably shipping costs and the time it takes to list and sell and then ship such cards.

At the sports card and gaming collectibles industry summit last month in Las Vegas, the company announced that it had listed its 10 millionth card and has thus far shipped 3.6 million cards to 75 countries.

A half-generation of untapped demand potentialI have a buddy named Randy Ohel, a 27-year-old professional poker player who won the $2,500 buy-in Triple Draw Lowball event and bracelet at the 2012 World Series of Poker in Las Vegas. (Randy final-tabled the $3,000 Pot-Limit Omaha Hi-Low Split event as well.) Randy is the type of guy who will bet on anything if he thinks there's value in it; he's also equally adept at wearing a sports jersey with his favorite team on it on one day, and a Super Mario Bros. T-shirt on the next. And so if there was anybody I know who I thought for sure would have a stash of baseball cards, it was Randy.

Except when I told Randy about my little baseball-card experiment, he looked at me like I was crazy. "I thought baseball cards aren't worth anything," he said.

At first, I figured he thought that was the case simply because that's the general perception of baseball cards these days, as it has been for the past 20 years. But then I had another thought: Randy isn't old enough to have been around when baseball cards were worth anything!

You see, I bought my first pack of baseball cards back in 1987, when I was 6. I stopped collecting around 1993 or 1994 -- and not because of the 1994 baseball strike, but rather because collecting was futile. The cards I could buy weren't worth anything, and the ones that had any value -- the 1992 Bowman, 1993 Upper Deck SP, 1993 Topps Finest, etc. -- were too expensive.

But at five years older than Randy, I'm just old enough to have been around when baseball cards had perceived value.

What that means is that there's half a generation of people aged 18-27 or so who are old enough to be in the workforce but not old enough to have bought into the baseball-card bubble. Incidentally, this half-generation also has more experience playing poker and other gambling games at this age than did the half-generation that came before it.

As I mentioned earlier, the baseball-card industry has seen primary sales fall from $1.5 billion in 1992 down to its current level of around $200 million. It's generally accepted that kids moved on from baseball cards to such things as video games and pogs; however, kids aren't responsible for the bursting of the bubble.

For starters, it wasn't kids who were hoarding whole cases of 1988 Donruss -- it was adults. Kids don't have money. Moreover, viewed from the reverse angle, the baseball-card industry grew to $1.5 billion in 1992 from about $500 million in 1989. If kids were responsible for the bursting of the bubble, then kids were also responsible for the bubble itself. And if kids were responsible for the bubble, then how did they get an extra $1 billion in discretionary income to spend on baseball cards?

The answer is that they didn't. Kids don't have discretionary income; they have allowances.

The probability is that the growth in the industry was due largely to grown adults who were hoarding sealed cases of cards in a period of extreme oversupply. And whether they were investing or gambling -- or thought they were investing but were actually gambling -- they did this because they thought they saw value in doing so. If kids got an extra billion dollars from their parents to buy baseball cards, it's because the parents saw potential value in buying baseball cards. And if it was adults who stopped buying baseball cards by the case, then the biggest reason they stopped was that it became clear by the early 1990s there was no value in it.

But then the next question is this: If adults were responsible for the bursting of the bubble and the shrinking of the market from $1.5 billion in 1992 to $200 million today, then where did they go?

It's interesting to note that in the time the baseball-card industry has shrunk from a $1.5 billion to $200 million, fantasy sports -- in which players draft teams and compete for prize money based on player stats -- has grown from virtually nothing to become an estimated $3 billion-plus industry by 2012, according to the Fantasy Sports Trade Association, or FTSA. That figure includes $1.44 billion in entry fees and prizes, and another $1.63 billion in direct related spending, including website hosting fees and subscriptions to magazines and websites catering to fantasy players.

So people didn't stop gambling on sports when the baseball-card bubble burst; they just started gambling on fantasy sports online. That's to say nothing of online sports betting, which itself generated $4.29 billion in revenue in 2005, up from $1.7 billion in 2001, according to Christiansen Capital Advisors. (Fantasy sports, interestingly enough, got a carve-out from the Unlawful Internet Gambling Enforcement Act of 2006.) Moreover, the National Gambling Impact Study Commission estimated that, in addition to the $2.88 billion legally wagered in Nevada sports books in 2011, there was another $380 billion in illegal wagers. (Note that amount wagered is different from revenue or amount spent, which is probably some single-digit percentage of amount wagered.)

And so, if there are -- as the FSTA says -- some 35 million-plus people in North America playing fantasy sports and already spending vast amounts of time and $3 billion-plus betting on and researching players and prospects across a variety of sports, and if there's another $380 billion-plus being wagered on sports either legally or (mostly) illegally, does it not stand to reason that some of these same people who had previously left the baseball-card market in the past 20 years might re-divert some of their expenditures back toward baseball cards if they thought there might be value in it?

A fascinating game, and a market primed for a potential mass revaluationI hadn't bought a baseball card in nearly 20 years. But in the past year or so since I've started re-examining the baseball-card market, I've learned a lot about markets in general, about consumer and investor psychology, and about the value of scarcity.

Last fall, I acquired a 2012 Bowman Chrome Yu Darvish RC Auto graded BGS 9.5 with a 10 auto for $350 on eBay. The card had gone at least as high as $950 raw (ungraded) when the 2012 Bowman set was released earlier in the year, and at the time it had an ungraded book value of $600 (currently at $350 -- these things are volatile). And as the card was the only one of its kind in that grade on eBay, I figured I could just buy it and relist it at book value.

When the card arrived, I immediately listed the card on eBay for $650 with the Buy It Now and Best Offer features, and as it was the only one listed at the time, I had some pricing power. A week later, another 2012 Bowman Chrome Yu Darvish RC Auto BGS 9.5/10 appeared on eBay in a straight auction, which took away my pricing power for the duration of the auction; a week later, I won that auction, too, for $350, thus once again clearing the market.

And a week after that, I sold the first one for $650.

The market for baseball cards is relatively liquid in the sense that if you want to sell something of value quickly, it's not too difficult to find a buyer, though you may not get what you want for it. But it seems that the market for the scarcer, higher-end cards is quite illiquid and consequently can be inefficient and potentially quite exploitable.

I tend to see it as a game, much like poker is a game, and the stock market is a game. Players make mistakes: People buy into bubbles and panic-sell on the downturn. People make valuation errors. People set up straight auctions for premium, relatively scarce cards into dry markets where nobody is looking, enabling values to be found. People sell premium cards at sub-premium prices because they need money quickly, also enabling values to be found. But at the same time, there is a lot of potential pricing power in the scarce, higher-end cards.

But on a macro level, I see a collectibles real estate market with favorable economics, with half a generation of untapped current demand and another fantasy-sports and legal/illegal sports-betting market of potential redemand, along with additional former collectors who don't play fantasy sports (like myself). And with recent supply levels geared toward a $200 million market -- combined with a general perception that baseball cards are worthless -- it may be time to consider the possibility that the modern baseball-card market may be primed for a mass revaluation.

Fool contributor Jeff Hwang is a gaming industry consultant and the best-selling author of Pot-Limit Omaha Poker: The Big Play Strategy and the three-volume Advanced Pot-Limit Omaha series. Jeff's next book, The Modern Baseball Card Investor,is due out later this year. Jeff owns shares of eBay. You can follow Jeff on Twitter, @RivalSchoolX.